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Detroit 3 and UAW could create healthcare pool

Healthcare costs continue to multiply in the US with no clear end in sight, but the United Auto Workers and the Big Three are negotiating a way to rapid growth under control. As part of the latest contract talks, the union has an idea to create a healthcare pool across all of its members at Ford, General Motors, and FCA US. If accepted, the company-wide integration would spread out the expenses and create a massive member base for bargaining with insurance companies. Both Ford and GM are at least considering the proposal, according to The Detroit News, and FCA US might be on board, as well. The idea is the work of current UAW president Dennis Williams and is based on the similar pool for the Voluntary Employee Beneficiary Association for retirees. "I've walked through this several ways; I just don't have any other answer," Williams said to The Detroit News. "I do believe this will work. It's worked with the VEBA." Williams was elected UAW president last year and won by an overwhelming margin. He vowed no more concessions to automakers. In addition to healthcare, the two-tier wage system is another major talking point in the contract negotiation because it gives fewer benefits to entry-level workers. Higher wages are also a request. Healthcare costs are a massive expense for automakers and are expected to reach over $2 billion this year, according to The Detroit News. The payments are up nearly 50 percent or more in just the last four years.

FCA to skip summer shutdowns as automakers rev up U.S. assembly lines

DETROIT — Several of FCA's facilities will skip their usual summer shutdowns to get a jump on rebuilding inventory, the company confirmed early Wednesday.  The plants that will remain open include three in the United States (Jefferson North in Detroit, Toledo Assembly in Ohio, and Sterling Heights Assembly in suburban Detroit), one in Canada (Brampton Assembly in Ontario) and two in Mexico (Saltillo Truck Assembly and Saltillo Van Assembly).  This will allow dealers to address depleted inventory of popular trucks and muscle cars, Automotive News reports. Other facilities not named will observe their normal one- and two-week breaks.  Automakers are speeding up U.S. assembly lines to meet recovering demand, increasingly confident coronavirus safety protocols are working to prevent outbreaks in their plants but wary of the challenges workers face outside. Screening workers for COVID-19 using temperature scans and questionnaires, the automakers have detected some people who reported for work despite being sick. Some plants have been briefly shut down for disinfection, but so far, there has not been a major outbreak within a U.S. auto plant since most reopened May 18, company and United Auto Workers union officials said. The risk of an infection picked up outside a plant spreading along assembly lines remains a prime concern, however. An outbreak could shut down a factory costing a manufacturer millions of dollars a day. The disruption caused by the pandemic is creating other challenges as well. At Ford Motor Co's F-series pickup truck plant in Louisville, Kentucky, the company has given more than 1,000 workers leave related to COVID-19 concerns. It hired temporary workers to fill their jobs as the plant accelerates production of trucks critical to Ford's financial recovery. Demand for pickup trucks helped boost U.S. auto sales in May, and contributed to stronger than expected overall U.S. retail sales for the month. Officials of UAW Local 862, which represents workers at the Louisville plant, said a lack of child care was a significant issue for members. It had led many to stay away from the plant and collect increased unemployment benefits provided under the federal CARES coronavirus relief act. Ford has now begun arranging subsidized child care for UAW workers, Gary Johnson, the automaker's head of manufacturing told Reuters.

Fiat To Pay $3.65 Billion For Remaining Chrysler Shares

Italian automaker Fiat SpA announced Wednesday that it reached an agreement to acquire the remaining shares of Chrysler for $3.65 billion in payments to a union-controlled trust fund. Fiat already owns 58.5 percent of Chrysler's shares, with the remaining 41.5 percent held by a United Auto Workers union trust fund that pays health care bills for retirees. Under the deal, Fiat will make an initial payment of $1.9 billion to the fund, plus an additional $1.75 billion upon closing the deal. Chrysler will also make additional payments totaling $700 million to the fund as part of an agreement with the UAW. The deal is expected to close on or before Jan. 20, according to a statement from Chrysler. Sergio Marchionne, CEO of both Fiat and Chrysler, has long sought to acquire the union's shares in order to combine the two companies. "The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization," Marchionne said in a statement issued by Turin, Italy-based Fiat. The deal eliminates the need for an initial public offering of the union fund's stake, which analysts had previously valued at $5.6 billion. Fiat went to court last year seeking a judgment on the price, but the trial date was set for next September. Marchionne can't spend Chrysler's cash on Fiat's operations unless the companies merge. In recent months he made it clear that he preferred to settle the dispute without an IPO, but filed the paperwork for the offering in September at the trust's request. Chrysler's profits have helped prop up Fiat on the balance sheet as the Italian automaker struggles in a down European market. The Auburn Hills, Mich., automaker earned $464 million in the third quarter on U.S. sales of the Ram pickup and Jeep Grand Cherokee, its ninth-straight profitable quarter. The results boosted Fiat, which earned $260 million in the quarter. Without Chrysler's contribution, Fiat would have lost $340 million. UAW/Unions Chrysler Fiat